Introduction
The assessment of financial knowledge and skills of consumers is essential
to study most of the consumer financial behaviors (e.g. indebtedness, saving and
investment, retirement planning, etc.). The choice between different options on
the market to satisfy a financial need or the awareness about long-term
financial consequences of today financial behaviors are widely affected by
consumer knowledge about basic financial principles and their ability to apply
these concepts in taking a real financial decision.

At the same time financial authorities and
regulators can benefit a lot from knowing how much consumers of financial
products and services are knowledgable. For instance, a lack of knowledge and
understanding about the functioning of basic financial products and a
misinterpretation about the possible consequences of the use of such products
justify the need of a consumer protection regulatory framework based on the
assumption that individuals are the "weak part" of a trade that need to be
strictly monitored and sometimes limited in their choices. If individuals were
enough financially literate to assess their financial needs and to choose the
right solution on the market, a more flexible regulation could be adopted.

The relevance about the consumer financial
literacy requires to carefully measure it by taking into account different
dimensions as (1) the selection of the areas of knowledge to take into account
in that process and (2) the level of detail in these areas that depend by (3)
the need of knowledge related with the financial need of individuals.

The attitude to measure financial literacy by
a small number of items and referring to very basic financial principles
suggested to improve the level of knowldege in this research fields developing a
robust methodology and testing it by an empirical analysis of financial
consumers in different countries.

Description
The research project is based on different
steps.

Step 1 - Review of the
literature and Questionnaire

The research project is based on a
preliminary review of the literature with the aim to assess how previous studies
measured financial literacy. The awareness of the methodology adopted and the
items used to measure financial literacy were used to develop a comprehensive
questionnaire made by three sections. The section 1 hosted questions on the
socio-demgraphic profile of the respondents (useful to analyse data taking into
account differences related with age, gender, income and other relevant
variables). Section 2 is made by 50 questions on financial knowledge. Ten
different areas of knowledge were tested by a set of 5 questions each. The five
questions differed by the level of difficulty in order to test different level
of knowledge. Section 3 regards the use of financial products and other
financial behaviors of the respondents.

This first phase of the project was developed
by the Italian branch of the network made by some researchers of the University
of Rome "Tor Vergata" (Rome, Italy), that plays a leading role in the management
of the whole project by connecting with the other national branches.

Step 2 - National surveys

The second step of the project sees the
questionnaire be administrated to a sample of individuals on a national base.
The use of an web based platform to administrate the survey by an on line
questionnaire guantees a common standard in the administration of the survey
(filling of the questionnaire, data collection, etc.). Thank to the use of the
same questionnaire, the merge of data from national surveys allow the creation
of an international database to be used for comparison between diffent
countries.

The administration of national surveys
already involved different countries (Italy, Sweden, Spain, Argentina, Brazil,
United Kingdom, Portugal, Lebanon, France), while other connections are under
consideration.

Step 3 - Analysis of data

Data from the surveys will allow to test
different measures of financial literacy and compare their effectiveness with
the ones adopted in previous studies in order to check the robustness of all the
measures and identify the more reliables. The use of these measures can help to
unfold the role of financial literacy in explaining specific financial behaviors
(e.g. use of credit cards, saving for retiremnts, asset allocation and
investment decisions, etc.).

Step 4 - Publication of results

Results from the analysis of either national
and international data will be spread in different manners. The will to increase
the hedge of knowledge on consumer finance is pursued by the writing of academic
papers presented in international conferneces and submitted to high quality
academic journals. With the aim to support policy makers and NGOs in their work
and trying to reach the general audience of financial consumers, summary reports
with descriptive statistics and ready-to-use recommendations will be provided
too.